Corn, soybeans, wheat give back some gains

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Corn, soybeans, wheat give back some gains

Soybeans were lower on profit taking and technical selling. Contracts started the session higher but moved lower with profit taking and spillover from soybean meal and oil. Nothing has changed fundamentally and weather concerns, especially for northern parts of the growing region, limited losses somewhat. The trade is waiting to see what the USDA reports for total 2021 U.S. planted area, with most expectations for an increase from the March projection. The USDA’s 2021 planted area numbers are out at the end of the month, along with quarterly grain stocks. Both the grain stocks report and the upcoming supply and demand estimates are expected to reflect supply tightness. Weather issues and acreage are both being watched closely because of that supply tightness. The U.S. cash basis has dipped as many processers apparently have near-term needs booked. Producers in Argentina have reportedly sold 20 million tons of the 2020/21 soybean crop, compared to 23.8 million a year ago.

Corn was lower on profit taking and technical selling, unable to follow through on the early gains. Corn was also watching U.S. weather and potential impact on early development and eventual yield, along with declining conditions in Brazil lowering production projections. Several private firms have lowered their guesses for Brazil over the past couple of weeks, with CONAB’s new update due June 10th. The latest estimate from Datagro is 101.65 million tons, above most other projections. The USDA’s next set of supply, demand, and production estimates is also out June 10th. The USDA’s U.S. production projection might be adjusted on the 10th, but any significant revisions might wait until after the updated acreage numbers. Stateside, freeze damage has been reported in parts of the upper Midwest. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 1.034 million barrels a day, up 23,000 on the week and 269,000 on the year. Stocks were reported at 19.588 million barrels, an increase of 608,000 from the previous week’s more than four-year low, but a decrease of 2.888 million barrels from this time last year. There’s been more talk, but no official confirmation, of new export demand from China for corn from either the U.S. or Ukraine. The USDA’s weekly export sales numbers are out Friday.

The wheat complex was lower on profit taking and technical selling, seeing a lack of follow through after higher overnight business and a higher open. Minneapolis was down, still concerned about conditions in the northern and northwestern U.S. Plains into Canada. Chicago and Kansas City are looking at comparatively good winter wheat conditions, but there are areas of concern for that crop as well. Globally, conditions mostly look good, aside from dry conditions in parts of the Black Sea region, especially southern Russia. Russia’s new weekly export tax system is in place, which could complicate trade for the world’s biggest wheat exporter. Moscow said this week the formula-based tariff will remain in place as long as strong demand continues. Rabobank is reportedly projecting a 2% year to year increase for planted area in Australia.